Tariff Revision Request (TRR)

TRR Number / 068 / TRR Title / Balanced Portfolio Transfer True-up Tariff Revisions
Cross Reference # / PRR –N/A BRR Other (Specify)______
Sponsor
Name / Charles Locke
E-mail Address /
Company / KCPL – Chair of the Billing Determinants Task Force
Phone Number / 816-556-2950
Date / 06/12/2012
Tariff Section(s) Requiring Revision / Section No. Attachment J, Section IV. A. 2.
Titles IV. Approved Balanced Portfolios
Tariff Version (effective date)
Requested Resolution / X Normal Urgent (provided justification below for urgent request)
Revision Description / Clarifies that the Balanced Portfolio zonal reallocation values calculated in the true-up process are to include additional amounts to compensate for the reduced zonal reallocations resulting from the phase-in during the first four years of the ten-year transfer period. The goal is to achieve portfolio balance for each zone over the ten-year period.
Reason for Revision / The Balanced Portfolio language in the current tariff does not state specifically how the required zonal balance is to be achieved in connection with the phase-in of the reallocation amountsduring the first four years.
Stakeholder Approval Required (specify date and record outcome of vote; n/a for those stakeholders not required) / MWG
BPWG (n/a)
TWG (n/a)
ORWG (n/a)
Other (specify) (n/a)
RTWGapproved the proposed language, as amended, in a 9-5 vote, with three abstentions, on 6/28/12.
MOPC
Board of Directors
Legal Review Completed / Yes(Include any comments resulting from the review)
No
Market Protocol Implications or Changes / Yes (Include a summary of impact and/or specific changes & PRR #)
No
Business Practice Implications or Changes / Yes (Include a summary of impact and/or specific changes & BPR #)
No
Criteria Implications or Changes / Yes (Include a summary of impact and/or specific changes)
No
Other Corporate Documents Implications(i.e., SPP By-Laws, Membership Agreement, etc.) / Yes (Include which corporate documents)
No
Credit Implications / Yes (Include a summary of impact and/or specific changes)
No
Impact Analysis Required / Yes
No
Proposed Tariff Language Revisions (Redlined)
IV. Approved Balanced Portfolios
One hundred percent (100%) of the annual transmission revenue requirement for an approved Balanced Portfolio shall be recovered through the Region-wide Charge.
A.Reallocation of Zonal Revenue Requirements for Deficient Zone(s)
For an approved Balanced Portfolio, the balance may have been achieved by transferring a portion of the Base Plan Zonal Annual Transmission Revenue Requirement and/or the Zonal Annual Transmission Revenue Requirement (“Reallocated Revenue Requirements”) from the deficient Zone(s) to the Balanced Portfolio Region-wide Annual Transmission Revenue Requirement in accordance with Section IV.4.c of Attachment O to this Tariff.
1.Implementation of Reallocated Revenue Requirements
The initial reallocation of the Reallocated Revenue Requirements from the deficient Zone(s) to the Balanced Portfolio Region-wide Annual Transmission Revenue Requirement shall occur when at least 10% of the estimated levelized annual transmission revenue requirements for the approved Balanced Portfolio has been included in rates under the Tariff (the “Trigger Date”).
On the Trigger Date and on the anniversary of the Trigger Date in each of the subsequent four years, 20% of the Reallocated Revenue Requirements required to balance the portfolio for the deficient Zone(s), as estimated in accordance with Section IV.4.c of Attachment O to this Tariff, shall be reallocated to the Balanced Portfolio Region-wide Annual Transmission Revenue Requirement. However, if all the upgrades in the approved Balanced Portfolio are completed and included in rates under the Tariff and the actual costs of any third party impacts identified under Section IV.3.c of Attachment O are determined prior to the fourth anniversary of the Trigger Date, the remaining Reallocated Revenue Requirements shall be reallocated and the true-up specified in Section IV.A.2 of this Attachment shall be performed.
The reallocation of the Reallocated Revenue Requirements shall be from the Base Plan Zonal Annual Transmission Revenue Requirement of the deficient Zone(s) first, then, if necessary, from the Zonal Annual Transmission Revenue Requirement of the deficient Zone(s).
2.Final Reallocation of Reallocated Revenue Requirements and True-up
Upon the completion and inclusion in rates under the Tariff of all of the upgrades that are part of the approved Balanced Portfolio and the determination of the actual cost of any third party impacts attributable to the Balanced Portfolio under Section IV.3.c of Attachment O, the final amount of costs to be reallocated from the Reallocated Revenue Requirements for the deficient Zone(s) to the Balanced Portfolio Region-wide Annual Transmission Revenue Requirement to balance the approved Balanced Portfolio shall be trued-up based on the applicable fixed charge rate and actual costs. This true-up shall result in Reallocated Revenue Requirements for the deficient Zone(s) that are sufficient to achieve balance over the ten-year period analyzed in accordance with Section IV.4.c of Attachment O. For each deficient Zone, this shall include annual reallocation amounts in the latter remaining years that are increased to a level adequate to offset, on a present value basis, the lower amount of reallocation resulting from implementation of the Reallocated Revenue Requirements in 20% annual increments as described in Section IV.A.1 of this Attachment. such that the present value of the total amount of the reallocation for each Zone is consistent with Section IV.4.c of Attachment O. The final reallocation shall be performed using the same benefits estimated at the time the Balanced Portfolio was approved.
Notwithstanding the foregoing, if the ten-year net present value of levelized annual transmission revenue requirements based on actual costs and third party impact costs under Section IV.3.c of Attachment O exceeds the ten-year net present value of estimated benefits for the entire approved Balanced Portfolio, then the reallocation for each Zone shall be set at a level that equates the benefit to cost ratio in each Zone to the trued-up benefit to cost ratio for the approved Balanced Portfolio over the ten-year period analyzed.
B.Reconfiguration of an Approved Balanced Portfolio
1.Conditions Under Which an Approved Balanced Portfolio may be Reconfigured
Under certain conditions, the Transmission Provider shall review an approved Balanced Portfolio for unintended consequences and may recommend reconfiguring a previously approved Balanced Portfolio. Conditions that would initiate such review include but are not limited to:
i.Cancellation of an upgrade that is part of an approved Balanced Portfolio;
ii.Unanticipated decreases in benefits or increases in the costs of upgrades that are part of an approved Balanced Portfolio or increases in the costs of third party impacts under Section IV.3.c of Attachment O; and
iii.Significant unanticipated changes in the transmission system.
2.Factors to be Considered in Determining Whether a Balanced Portfolio Should be Reconfigured
Reconfiguration of a Balanced Portfolio shall be evaluated based upon the following general factors, including but not limited to, the impact of the reconfiguration on:
i.Meeting the conditions for a Balanced Portfolio specified in Section IV.3.e of Attachment O to this Tariff;
ii.The number of deficient Zones as defined in Section IV.4.a of Attachment O to this Tariff;
iii.The amount of Reallocated Revenue Requirements that needs to be transferred from the deficient Zone(s) to the Balanced Portfolio Region-wide Annual Transmission Revenue Requirement in order to balance the reconfigured portfolio; and
iv.The increase in the overall cost of the reconfigured Balanced Portfolio, if upgrades are added to the portfolio.
3.Reallocation of Reallocated Revenue Requirements
If a reconfigured portfolio is to be balanced by transferring a portion of the Reallocated Revenue Requirements from the deficient Zone(s) to the Balanced Portfolio Region-wide Annual Transmission Revenue Requirement, the reallocation of the revenue requirements specified in Section IV.A of this Attachment shall be adjusted based on the costs and benefits of the proposed reconfigured Balanced Portfolio as approved.
4.Recommendation and Approval of a Reconfigured Balanced Portfolio
Based on the analysis performed in accordance with Sections IV.B.1 through IV.B.3 of this Attachment, the Transmission Provider shall provide a report and make a recommendation in regard to reconfiguration of the Balanced Portfolio to the Markets and Operations Policy Committee. The Markets and Operations Policy Committee shall consider the Transmission Provider’s report and recommendation, and shall provide its own recommendation (along with the Transmission Provider’s report and recommendation) to the SPP Board of Directors. Based upon these recommendations, the SPP Board of Directors shall take action regarding reconfiguration of the Balanced Portfolio.
Proposed Market Protocol Language Revision (Redlined)
n/a
Proposed Business Practices Language Revision(Redlined)
n/a
Proposed Criteria Language Revision (Redlined)
n/a

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